adminnickel miner is converted into equity.
The Alternative Investment Market-listed firm holds 52,9 percent shareholding in the Zimbabwe Stock Exchange-quoted nickel producer.
However, the diversified resource firm will need regulatory approval to proceed.
With the current 52,9 percent equity in BNC, Mwana is supposed to shed its stake to a maximum 9 percent in line with the indigenisation and empowerment law. Under the law, foreign-owned firms are required to localise ownership of at least 51 percent to black Zimbabweans.
Mwana extended the convertible loan facility to enable BNC to keep assets under care and maintenance while restart funding is being sought.
The nickel extractor suspended mining operations in 2008 at the height of the economic downturn and the plunge in international nickel prices.
But its majority shareholder is poised to increase shareholding in the company to about 74 percent if it exercises the option to convert the loan to equity.
However, this will only be possible if Government grants the permission in view of the law that governs foreign shareholding in local firms.
By converting the loan to shares Mwana will drift further from the regulatory threshold.
“Mwana will be able to exercise the convertible element of the facility only upon a specific approval by the Reserve Bank of Zimbabwe and the Ministry of Youth Development, Indigenisation and Empowerment,” the statement said.
BNC shareholders approved the US$10 million convertible loan facility at an annual general meeting of the local firm held on September 22.
A study by SRK Consulting established that BNC needs US$26 million to resume operations. The report also confirmed existence of 3,5 million tonnes of ore with potential to increase, at an average grade of 1,29 percent.
The SRK report did not cover Shangani Mine or the restart of BNC’s smelter and refinery complex.
Additional aspects of the Trojan restart programme such as clearing of debts and staff levels were not covered in the report.
While Mwana Africa’s nickel unit is singing the blues production at its local gold mining subsidiary Freda Rebecca has hit top gear totalling 8 224 ounces in the three months to June 2011 against a target of 2 500 ounces.
Average monthly production was 2 741oz despitel some downtime required at Mill 1 for the replacement of the discharge grate and to allow time for the connection of Mill 2 to the common circuit production.
Mill 2 has been commissioned on time and within budget and the ramp- up to Phase 11-production target of
50 000oz per annum is expected by September.
While Freda’s Mill 2 has performed beyond expectation focus this quarter will be on optimising operating parameters for combined milling circuit.
Once this is complete,d further improvements will be retrofitted to the existing Mill 1 circuit to improve recoveries by optimising mill speed, liner set up and associated liner wear issues and synchronising the dual circuit.
Mwana said mined tonnage stood at 179,2t in June from 154,7t in March and milled volumes rose from 141,7t to 151,2t over the same period.
Mwana received an average gold price of US$1 397 per oz in March and about US$1 517 per oz in the quarter to June as global prices went bullish. Costs per ounce rose from US$958 to US$1004 during the
quarter.
In April, Mwana announced increased mineral resource at
Freda, which was verified by SRK Consulting.
Based on a cut-off grade of 1,5g per tonne the indicated mineral increased from 1 million oz to 1,67million oz.
The inferred mineral resource, similarly defined, is now at 0,64 million oz.
Online Reporter